Wait, Procurement Affects

In Jason's absence at ISM, I sat in on a webinar presented by Genpact, entitled "How CFOs can Maximize ROI and Business Value From Source to Pay."

After defining the roles of the CFO (assigning resources to procurement, awarding procurement professionals for the savings they achieve, engaging lines of business to engage with procurement, and being the means with which to get the CPO's agenda on the board room agenda) and the CPO (to do whatever the CFO tells him or her to do and save the most money while doing so), the presenter went on to emphasize the importance of procurement's collaboration with finance, a union that he argued would manage "100% of the spend, 100% of the time!!!!!!!"

I apologize in advance for the literary metaphor, but the statement immediately conjured up images of Vonnegut. Stay with me here for a minute, if you will. Like Vonnegut's ice-nine, Procurement should infiltrate every nook and cranny within an organization. The webinar presenter opined that by really sitting down and having your internal procurement professionals examine policies and procedures, visible spend and savings strategies, relationships, best practices, and then finding a technology source to manage all this, that businesses can transform procurement working hand-in-hand with finance. How? By increasing spend under management or measuring procurement's ability to positively impact and influence all addressable spend of the overall enterprise and within each business unit, function, and profit and loss statement are but two examples.

Further to the point of infiltrating business units, he offered the suggestion that procurement shouldn't just work with finance (though this is a critical joining of forces). By extending spend awareness into divisions such as HR, marketing, etc., and providing them with clear savings goals and results, these managers then become more engaged in the spend management process, and thereby the whole company gains a crystal clear view into exactly how individual departments affect both spend and savings.

Vonnegut sums it up best in Cat's Cradle:

"...suppose, young man, that one Marine had with him a tiny capsule containing a seed of ice-nine, a new way for the atoms of water to stack and lock, to freeze. If that Marine threw that seed into the nearest puddle...?" "The puddle would freeze?" I guessed. "And all the muck around the puddle?" "It would freeze?" "And all the puddles in the frozen muck?" "They would freeze?" "And the pools and the streams in the frozen muck?" "They would freeze?" "You bet they would!" He cried. "And the United States Marines would rise from the swamp and march on!"

And, if you believe Genpact's argument, so will the rest of your procurement organization (if you're convincing enough), allowing you to walk hand-in-hand with finance to slay the spend dragons in front of you -- or freeze them in their tracks as the case may be.